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Insurance Article

Tips to Finance Your Second Home

July 18 2018

There are several ways in which you can finance your second-home.

So you are ready to make the commitment of buying a second home. It might be a vacation home for occasional getaways, a retirement dream or an upgrade for a growing family. But, the problem is that you don’t know how to finance it. Don’t let the financial technicalities intimidate you from your dream lifestyle! Here are a few helpful tips to finance your second home.

Loan Against Property

Loan Against Property (LAP) lets you borrow funds against your first home. Your home is an immovable, valuable asset and on the basis of its market value, you can obtain a loan for financing your second home. It’s easier to get such a loan because it’s a secured loan with your first property acting as a guarantee.

Second Home Loan

Just like you did for your first home, you can apply to the bank for a home loan for your second home too. However, this may prove to be a little harder than the first time around. The bank may be stricter in this case and might do a detailed investigation of your financial position.

In case the value of your first home is more than the value of the second one, it will be easier to get a second home loan.

Top-up Loan

A top-up loan is an easier way to finance your second home. In a top-up loan, you are not required to go through the whole process of obtaining a new loan again. You can simply apply for funds on the basis of your first home loan.

This will add to the existing EMIs you are already paying for your first home. A top-up loan will save you the trouble of process technicalities and is a quicker way to get access to funds to finance your second home.

Rent Out Your First Home

If you’re purchasing your second home with a view of residing there, then you can make optimum utilization of your resources by renting out your first home. The rent earned from the first property will act as a regular cash inflow that will help you pay the EMIs for your second property.

With all these ways to finance your home, you will be a second-home owner soon enough. But your work doesn’t end at the mere purchase and procurement of the home. You also have to ensure that it’s safeguarded against whatever situations life throws at it with a home insurance policy.

Related Article:

How to Protect Your Home While on Vacation
Know What Is A High Value Home Insurance

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